Thursday preview: Shell, Astra, Bloomsbury

26th Oct 2011 15:49

Results from Royal Dutch Shell will, as usual, be compared to those from BP. Charles Stanley's Tony Shepard thinks the comparison will be favourable. "Shell could report a 29% rise in Q3 [third quarter] earnings to $6.3bn which, on the face of it, will be more positive than other groups such as BP or even BG Group. A feature of the Q3 oil & gas reporting season will be disappointing production volumes across the industry partly due to heavy maintenance schedules. However, Shell's Q3 report could show that the group has achieved small volume growth helped by its new projects," Shepard suggests. "Q3 should provide further comfort that its major new upstream projects are on track especially Pearl GTL. This together with the expansion of Canadian oil sands and Qatar gas are expected to add some 400,000 boe/d [barrels of oil equivalent per day] for Shell and these projects will make a significant contribution to the 2012 results both in terms of profits and cash flow," Shepard added.While it is a big week for results from the oil giants, the pharmaceuticals firms are also muscling in on the action, and on Thursday AstraZeneca will release its third quarter figures.Credit Suisse is looking for flat sales growth and earnings per share (EPS) growth of 7%. As ever, patent expiries will be an issue for Astra, but it will benefit from reduced research and development spending, the Swiss broker says."Nexium and Arimidex sales will continue to suffer post patent expiries in Europe while we expect the Seroquel franchise to have a slightly weak quarter in both the US and Europe. However, as in 1H11 [first half of 2011] these headwinds will be largely offset by growth (albeit slowing) for Crestor and in the emerging markets," Credit Suisse predicts. Charles Stanley, meanwhile, predicts third quarter revenue of $24,694m, slightly up from $24,652m in the corresponding period of 2010. The broker reckons core operating profit will be a nice round number, $10bn, "which reflects further margin compression as seen in 1H2011."Charles Stanley analyst James Dawson thinks the focus will be on the cholesterol market. "Concerns over the sales prospects for Crestor post the introduction of generic Lipitor (due end of Nov-2011) remain. Crestor reported global sales of $5.7bn in FY2010 [fiscal 2010], accounting for 17% of group sales," Dawson notes, adding in passing that a recent test failed to demonstrate that Astra's Crestor was statistically better at clearing arteries than rival Lipitor."Generic competition elsewhere - Ranbaxy Laboratories (due to launch the generic Lipitor) announced in Sep-2011 the first generic version of Nexium on sale in the UK. Whilst this market represents a relatively small proportion of the global Nexium sales, it is nonetheless further pressure on AZN [Astra] on one of the most significant drugs within its portfolio (UK sales of Nexium are estimated at $95m per year, of $5bn worldwide in FY2010)," Dawson added. Moving on to the mid-caps, Harry Potter publisher Bloomsbury reports interim figures that should, according to Altium Securities, "provide an opportunity to assess trading across the retail channel, the performance of the group's burgeoning non-fiction interests, and should provide an update on acquisition plans and the price and availability of appropriate targets."The broker thinks investors will also be keen to see how well Bloomsbury is attacking the electronic book (e-book) market. INTERIMSBloomsbury Publishing, Luminar Group HoldingsINTERIM DIVIDEND PAYMENT DATEDevelopment Securities, Henry Boot, Inmarsat, International Power, Lighthouse Group, Puma VCT III, Puma VCT IV, Quarto Group Inc.INTERNATIONAL ECONOMIC ANNOUNCEMENTSBloomberg Consumer Confidence (US) (14:45)Business Climate Indicator (EU) (10:00)Continuing Claims (US) (13:30)Economic Sentiment Indicator (EU) (10:00)GDP (Advance) (US) (13:30)Initial Jobless Claims (US) (13:30)Q3AstraZeneca, Autonomy Corporation, Coca-Cola HBC S.A., Eurasia Drilling Co Ltd. GDR (Reg S), Kazakhmys, Norsk Hydro ASA, Royal Dutch Shell 'A', Royal Dutch Shell 'B', Virgin Media Inc.GMSEvolution GroupFINALSClinton Cards, Mouchel GroupIMSSAPR Energy, Inchcape, William HillEGMSCPL Resources, Puma VCT III, Puma VCT IVAGMSAlumasc Group, Ashmore Group, CPL Resources, Go-Ahead Group, Murgitroyd GroupTRADING ANNOUNCEMENTSCroda International, DS SmithFINAL DIVIDEND PAYMENT DATEOxford Instruments, Penna ConsultingQ1Energy XXI (Bermuda) (Di)